EdWatchesBoxing

Check out the sec filings for the Fairholme fund. You'll see their use of leaps for Sears Holdings over the last few quarters. They must be happy with their calls with the 60 strike price. fairholme sec link

I share common thoughts with WEST and I'm not waiting for the story to be told. I am also in early. I am hoping that WEST will be seen as one of the ultimate Phil Fisher type stocks in 10 to 15 years. This is one holding that I plan to stash away and pull it out 20 years from now, retire, move to Vegas and play poker for the rest of my life :) I don't think I can say the same for anything else I own. What excites me the most is that Sardar is one year younger than me. I am positive Sardar will do well with his skill and a little luck. I think Biglari is showing his business acumen and determination with his role with SNS. Very few thought that the current improvements were possible in such a short period of time. I also like that that Sardar has many opportunities (ie: pink sheets, Mustang Capital) because he is working with small amounts of capital.

I also think that Berkshire has the proper people in place to keep the machine running well, way after Buffett and Munger (even Lou Simpson) are gone. I won't repeat the stuff that's already been mentioned.

If I'm not mistaken, Norm, the founder of the Stingy Investor, posts here from time to time (at least I remember him from the MSN days). He also writes for a magazine, MoneySense, so I'm pretty sure that he doesn't mean to mislead with the performance information on the Stingy Investor. FWIW, I find that site to be an excellent source of personal finance/investing information.

From a quick look of the airline financial statements a while back, only Southwest and WestJet were interesting. I've read a lot about Southwest's culture, at least what was written in Fortune (maybe 10 years ago). WestJet has the commercials about their workers being owners. That's a pretty good message.

Miller's and Michael's performance in 2008 was extremely crappy that's for sure. However, with Miller, I think I see his reasoning because it's been noted that he studies gambling theory. It's like he's looking at a coin flip situation where the odds are in his favour, let's say something like 60/40 (60% win, 40% lose). Each position he takes, he believes he's taking the winning side. I'm sure he wants a large margin of safety, but it is now obvious that he was willing to play more marginal situations. His bets were probably made on situations like some 60/40, maybe some 55/45, possibly some 50/50. He probably also made some errors, so they may have placed some bets on some negative expectation positions where the odds were against them. I think he figured that risk of ruin was low, even in 2008, which off course back-fired performance wise. I don't think he was trying to completely understand every single position he took. It's like Miller was playing in a poker game, got a little bored and started to play marginal hands hoping that they would hit and provide the big payoff.

SD, I know the banks are really passing the risk onto the taxpayer, but do you think the banks are immune to what may happen in a correction? I think they will go down, but I see your point. I also traced the flow of the insured mortgages into the bonds guaranteed by CMHC. The stat that the mortgages on the bank balance sheets have not grown is quite telling. My thoughts on Canada mortgage bonds are that spreads may widen with price erosion, along with increased interest rates. Any thoughts?

You beat me to it with the americacanada blog post. I have been thinking about buying puts on the Canadian banks. The author of the post in the second link seems to think the same way. Some of the comments were also interesting. If it is true that most mortgages since 2007 have been insured. I really don't think it will end well for Canada. When the RE bubble bursts, it hurts to think that we will all be paying for it. For now though, people think I'm the crazy one for thinking that the housing run will end badly.

Thanks for the link. Many of the points apply to life in general.

Wow?!? I know that May and June TREB numbers were off the charts, but this is crazy. I guess if people are buying mainly with cash, then it won't be so bad. However, I imagine a good number of people are jumping in because of the low rates. Don't they think about where rates will be in 3-5 years from now and how it will affect their monthly payments? Maybe I'm missing something? Hoodlum, are you planning on renting for the time being, or are you going to downsize so that the possible drop doesn't affect you as much?

I heard about the drops in San Diego and LA, but a friend that owns a place in Sunnyvale was saying that SF hasn't really gone down. Sounds like CA's in pretty bad shape. I know prices were/are crazy high in the Bay area, so a lot of people are hurting. I don't think we'll see those type of drops here, except maybe for some of the poorly located condos.

In the US, hasn't it already crashed in certain places? Phoenix and Las Vegas come to mind. I imagine in places like NYC and San Fran, there would be higher demand, even in recessionary periods, that results in less of a drop. RE is what it is, I think that board members see RE differently compared to the general public. I wouldn't want > 50% of my net worth in my house, but for many this is the case. I think this is why the US govt is "smoothing" out the decline, but I think that people still feel the hurt. In Canada, I believe that the lower overnight rates are creating the unintended effect of cheap money for home buyers. In general, I don't think Canadians are much better off than Americans w.r.t. debt to income ratios. It's just that the sentiment is still generally positive up here.

Nice, light read. Thanks!

I've been waiting about 3 years for housing to correct in Toronto. Vancouver is in worse shape because of the income factor, which was mentioned earlier. The Vancouver market may stay high due to the demand created by the Olympics, then again it may not (but I believe the Olympics may hurt owners due to property tax hikes). Garth Turner has a blog on RE and I was surprised that banks are finding ways to get people locked into "zero-down" mortgages. I thought the government closed this off last fall. I guess the financial institutions always find creative ways to get around obstacles when they really want to. http://www.greaterfool.ca/2009/06/15/part-deux/ If this stuff is true, I am glad I am on the sidelines right now.

I am concerned that the housing price levels in certain parts of Canada are unsustainable. I don't think that it will end well, especially for those buying with little (or zero) down and in this low interest rate environment. I wonder if it's possible to profit off this.

Thanks for the reply. An investorline rep got back to me and mentioned that my account is only enabled to write covered options. They said that my account can be upgraded to allow me to write naked puts, but I need to fill out an application and provide a separate letter to state that I wish to write naked puts. The application doesn't provide this option. I was planning on writing cash covered puts, so at least now I know I can do it! Hope this helps others.

I just found out that I can't write naked puts with BMO investorline. Just wondering how other Canadians are doing it. Which broker do you use? TIA

Jon Stewart was really well prepared for this interview. He really wasn't being too funny. I think was very serious in his question delivery. At times, he was angry. I really enjoy the daily show. I also recommend the Colbert Report. On March 4, Colbert was talking to some IMF guy, who was comparing America to an emerging market. Here's the link for people in Canada, otherwise you can google it: http://www.ctv.ca/servlet/ArticleNews/show/CTVShows/20061117/ColbertReport-default

I don't know what's worse: the article or some of the stupid comments left by some of the readers.

Thanks for all the useful tips! My studying is focused on the Learning Outcome Statement summaries. It's good to hear to that I'm on the right track. If I have other questions, I'll post them.

Hi everyone, Just wondering if anyone has written this exam recently. I'm currently going through the curriculum material and I'm answering the review questions in each section. I am curious to see how others may have studied for this exam. E

I think that the article is a little wrong on housing up here in Canada. Our correction is just starting. I don't know if the avg drop will be as severe as the US averages, but I think price will come down more in Canada. In the Toronto area, sales volume has gone down a lot, but price has not yet dropped much. I think inventory is up from the statistics that I've seen.

1.8B Tuition... (plus 40M annually)... I'll personally buy that anytime. Very interesting article. I like the references to poker and gambling. I think the problem with their GM trade was that they were not, in poker terms, considering their bankroll management. I wonder if there are poker players that are value investors. The best example I read about was when Charlie Munger was playing poker during WW2. I also find it interesting that he studied horse racing and found that betting could also be mispriced. In poker, the best players don't necessarily have the best playing skills, they can usually play their "A" game for really long times and know how to play within their limits. I think these skills also apply to investing, they're just described differently.

My username was sane0t01 on the MSN forum, but I took this chance to change it. Now my username refers to my favourite poker game. Looking forward to joining in on the discussion at our new location.